Farrow Co. expects to sell 400,000 units of its product in the
next period with the following results.
Sales (400,000 units)
$
6,000,000
Costs and expenses
Direct materials
800,000
Direct labor
1,600,000
Overhead
400,000
Selling expenses
600,000
Administrative expenses
1,028,000
Total costs and expenses
4,428,000
Net income
$
1,572,000
The company has an opportunity to sell 40,000 additional units at
$13 per unit. The additional sales would not affect its current
expected sales. Direct materials and labor costs per unit...